DoubleClick Exits Profile-Based Targeting

Web ad giant DoubleClick has quietly backed out of selling ads targeted via profile, discontinuing its Intelligent Targeting unit.

The move, which occurred officially at the end of December, will mean that New York-based DoubleClick will sell impressions only in run-of-network or run-of-site buys, or targeted via cookie-based criteria (such as by the recipient’s location or browser.)

DoubleClick also provided the Intelligent Targeting technology to consumers of its DART ad server. That practice, too, is halted.

What’s troubling with the news is that effective profile-based advertising had long been one of online advertising’s major promises. Since its early days, the industry’s advocates championed the online profile as a way to better segment consumers and to derive greater results from ad buys.

For instance, as opposed to buying Web impressions based on the hosting site’s subject matter, or based on information gleaned from a user’s cookie (like their location or browser), profile-based targeting could deliver an automobile banner to a user that had used a search engine to look up “cars” in the past week.

But players increasingly have found it difficult to convince advertisers to pay a premium for profile-targeted ads. Rival Web ad player Engage, which exited the media business several months ago, had made profile targeting a major cornerstone of its offering.

Now, DoubleClick’s exit of the business indicates that even the industry leader found it too unprofitable to continue pushing profile-based ads.

“It’s just a question of timing in the marketplace right now,” said Andy Ellenthal, who is director of sales and business development in DoubleClick’s TechSolutions for Advertisers group. “This isn’t the best time tin the marketplace to be charging a high CPM, certainly can be more expensive than some of the traditional media.”

The move also comes amid DoubleClick’s continuing efforts to focus chiefly on its higher-margin technology and research offerings, rather than on media sales. Additionally, with the heavy technology costs associated with capturing, storing and dynamically targeting profiles, there’s a crucial cost savings to be had as well.

“We’ve put a heavy emphasis on our technology and research products in the last year, and we’ve made a commitment to be profitable in 2002,” Ellenthal said.

While it’s abandoning its practice of targeting ads via profiles, online tracking still plays a major role in DoubleClick’s product line. The company offers Spotlight, which tracks post-click impressions; and Boomerang, a retargeting offering. DoubleClick also offers clients of its co-op database, Abacus, a product that uses profiles and modeling to increase e-mail marketing effectiveness.

Additionally, Ellenthal said that the company and its partners have seen heightened interest from advertisers seeking cookie-based targeting.

“Our clients are still using things like frequency capping and geotargeting and time-of-day pretty heavily, so there’s still an interest,” he said. “Things like geotargeting are something that clients seem willing to play a premium for. Like an auto company advertising their dealer [locations] or a travel company offering regional-based fares; or the financial sector, by time of day.”